1045-00004 · Client 1045 · Engagement & Administration

engagement-letter-brb.docx DOCUMENT Litigation

14 / 35 ← → ✕

CALDERWOOD & HARKNESS LLP Attorneys at Law 600 Lexington Avenue, 30th Floor New York, New York 10022 Telephone: (212) 554-7000

November 4, 2024

Via Email and U.S. Mail

Margaret Linden, Esq. Senior Vice President & General Counsel Belmont Ridge Bank NA 1200 Avenue of the Americas, 38th Floor New York, New York 10036

Re: Engagement of Calderwood & Harkness LLP — Defense of Counterclaims in Belmont Ridge Bank NA v. Triton Harbor Industries, LLC, Marcus J. Kappel, and Elaine D. Kappel, Index No. 654871/2024, New York Supreme Court, New York County, Commercial Division

Calderwood & Harkness Matter No. 1022-00005

Dear Ms. Linden:

1. Introduction and Purpose

Thank you for selecting Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm") to represent Belmont Ridge Bank NA ("BRB" or the "Client") in connection with the above-referenced matter. We are pleased to have the opportunity to serve as counsel to BRB and are committed to providing the highest quality legal representation in the defense of the counterclaims asserted against BRB, as well as in the continued prosecution of BRB's original claims in this action.

The purpose of this letter is to set forth the terms and conditions under which Calderwood & Harkness will provide legal services to BRB in this engagement. This engagement letter, upon your countersignature, constitutes the binding agreement between the Firm and the Client with respect to the matters described herein and supersedes any prior oral or written discussions, understandings, or agreements regarding the scope, terms, or conditions of the Firm's representation of BRB in this matter.

We ask that you please review this letter carefully, countersign the enclosed duplicate copy, and return it to my attention at the address set forth above (or via email to losei@calderwoodharkness.com) to confirm your acceptance of these terms. We are, of course, available to discuss any questions or concerns you may have regarding the terms set forth herein before you execute this agreement.

2. Identification of the Client

The client in this engagement is Belmont Ridge Bank NA, a national banking association chartered under the authority of the Office of the Comptroller of the Currency, OCC Charter No. 14-00927, with its principal executive offices located at 1200 Avenue of the Americas, 38th Floor, New York, New York 10036. All references in this letter to "BRB," the "Client," or the "Bank" shall refer exclusively to the corporate entity Belmont Ridge Bank NA.

It is important to clarify that Calderwood & Harkness's representation in this engagement is limited to the corporate entity Belmont Ridge Bank NA. By virtue of this engagement, the Firm does not represent, and shall not be deemed to represent, any individual officers, directors, employees, agents, or other personnel of BRB in their personal or individual capacities. Without limiting the generality of the foregoing, this engagement does not establish an attorney-client relationship between Calderwood & Harkness and any of the following individuals: Derek Whitmore, Senior Vice President, Head of Special Assets Group; Joanna Reeves, Vice President, Special Assets Group; Philip Aaronson, Executive Vice President, Chief Credit Officer; or any other BRB personnel who may have had involvement in the transactions, negotiations, or decisions at issue in this litigation.

We note that certain individual officers and employees of BRB may be fact witnesses in this litigation and may also have potential personal exposure arising from the allegations in the counterclaims, particularly with respect to the claims of fraudulent inducement and negligent misrepresentation. We strongly recommend that BRB advise any such individuals of their right to seek independent legal counsel at their own expense, or at the expense of BRB to the extent permitted by applicable law, regulation, and BRB's organizational documents. If you would like to discuss this recommendation in further detail, or if BRB wishes to engage Calderwood & Harkness to represent any individual employee in connection with this matter, a separate written engagement letter would need to be entered into for each such individual, subject to any applicable conflict-of-interest considerations.

3. Scope of Engagement

3.1 Defense of Counterclaims

Calderwood & Harkness is retained to defend BRB against the counterclaims filed on October 18, 2024, by Triton Harbor Industries, LLC, a Delaware limited liability company ("Triton Harbor"), Marcus J. Kappel, and Elaine D. Kappel (collectively, the "Counterclaimants"), in the action styled Belmont Ridge Bank NA v. Triton Harbor Industries, LLC, Marcus J. Kappel, and Elaine D. Kappel, Index No. 654871/2024, currently pending in the Commercial Division of the New York Supreme Court, New York County, before the Honorable Althea Marchetti, J.S.C.

As set forth in the Counterclaimants' Answer and Counterclaims, the counterclaims assert the following causes of action against BRB:

(1) Fraudulent Inducement — alleging that BRB, through its officers and agents, made material misrepresentations and omissions to Triton Harbor and the individual Kappels in connection with the negotiation and execution of the Forbearance and Modification Agreement dated October 6, 2023, and the amended and new personal guaranties;

(2) Negligent Misrepresentation — alleging that BRB owed a duty of care to the Counterclaimants and breached that duty by providing false or misleading information regarding the terms, conditions, and consequences of the forbearance arrangement;

(3) Breach of the Implied Covenant of Good Faith and Fair Dealing — alleging that BRB acted in bad faith in the administration of the Forbearance and Modification Agreement by, among other things, accelerating the loan obligations without providing a meaningful opportunity to cure; and

(4) Rescission — seeking rescission of the Forbearance and Modification Agreement dated October 6, 2023, and the amended personal guaranty executed by Marcus J. Kappel and the new personal guaranty executed by Elaine D. Kappel, both dated October 6, 2023, on the grounds that the Counterclaimants' consent was procured by fraud and duress.

The Counterclaimants seek compensatory damages in an amount not less than Twelve Million Five Hundred Thousand Dollars ($12,500,000), together with unspecified punitive damages, attorneys' fees, costs, and such other and further relief as the Court may deem just and proper.

The scope of Calderwood & Harkness's defense engagement encompasses all phases of this litigation with respect to the counterclaims, including but not limited to: (a) pre-trial proceedings and conferences; (b) fact and expert discovery, including document production, interrogatories, depositions, and requests for admission; (c) motion practice, including motions to dismiss, motions for summary judgment, and all other pre-trial and in limine motions; (d) trial preparation, including witness preparation and the development of trial strategy; and (e) trial. The scope of this engagement may be modified by mutual written agreement of the Firm and the Client at any time.

3.2 Prosecution of Original Action

In addition to the defense of the counterclaims, Calderwood & Harkness is retained to continue the prosecution of BRB's original claims in the same action, Index No. 654871/2024, as initially filed on August 12, 2024, by BRB's prior counsel of record, Blakemore & Stern LLP. The Firm will assume responsibility for the continued prosecution of BRB's affirmative claims from the point at which the substitution of counsel becomes effective.

BRB's original claims, as set forth in the Verified Complaint filed on August 12, 2024, seek the following relief:

(a) enforcement of the Forbearance and Modification Agreement dated October 6, 2023, between BRB and Triton Harbor Industries, LLC;

(b) judgment on the amended personal guaranty of Marcus J. Kappel, unlimited in amount, as amended and restated on October 6, 2023;

(d) recovery of the full deficiency balance owed to BRB following the acceleration of the credit facilities; and

(e) attorneys' fees, costs, and such other relief as may be appropriate.

As of April 15, 2024, the date of acceleration, the total accelerated amount owed by Triton Harbor and the guarantors was Seventeen Million Four Hundred Fifty-Six Thousand Two Hundred Twelve Dollars ($17,456,212), consisting of the following components:

Additional interest, default interest, and fees continue to accrue in accordance with the terms of the underlying credit agreements and the Forbearance and Modification Agreement.

3.3 Related Matters Excluded from Scope

Notwithstanding the foregoing, this engagement does not include, and Calderwood & Harkness is not being retained to provide, legal services in connection with the following matters, each of which is expressly excluded from the scope of this engagement:

(a) Regulatory Proceedings. Any proceedings, examinations, investigations, or inquiries initiated by or before the Office of the Comptroller of the Currency ("OCC"), the Federal Deposit Insurance Corporation ("FDIC"), or any other federal or state banking regulatory authority in connection with BRB's lending practices, loan administration, or any related matters;

(b) D&O Insurance Coverage. Any disputes regarding directors' and officers' liability insurance coverage, indemnification, or reimbursement arising from the counterclaims or any related proceedings, which we understand are currently being handled by Crane, Alcott & Shire LLP, under the supervision of Robert Alcott, Esq.;

(c) Foreclosure Proceedings. The foreclosure proceedings on the Long Island City terminal facility (the "Collateral"), which were commenced on or about May 20, 2024, in the Supreme Court, Queens County, unless Calderwood & Harkness and BRB separately agree in writing to expand the scope of this engagement to include those proceedings;

(d) Tax and Accounting Matters. Any tax advice, tax planning, or accounting matters, including but not limited to the classification of the Triton Harbor loan for loan-loss reserve purposes, which we understand may involve BRB's external auditors, Tavrenis & Hatch CPAs LLP; and

(e) Title Insurance Claims. Any claims or proceedings under or related to the title insurance policy issued by Harborview Title & Escrow Co., Policy No. HT-NYC-2021-04553, pertaining to the Long Island City terminal facility.

If, during the course of this engagement, circumstances arise that require the scope of the Firm's representation to be expanded to encompass any of the foregoing matters or any other matter not described in Sections 3.1 and 3.2 above, the parties will execute a supplemental engagement letter setting forth the terms and conditions applicable to such expanded representation.

4. Substitution of Counsel

Calderwood & Harkness is replacing Blakemore & Stern LLP (David Blakemore, Esq., 120 Broadway, Suite 3500, New York, New York 10271) as counsel of record for BRB in the above-referenced action, Index No. 654871/2024.

Promptly upon the execution of this engagement letter, Calderwood & Harkness will prepare and file a Notice of Substitution of Counsel with the Clerk of the New York Supreme Court, New York County, in accordance with applicable rules and procedures, and will serve a copy of such notice on all parties, including opposing counsel, Kestrel Voss & Huang LLP (Theodore "Ted" Huang, Esq., and Natasha Orlov, Esq., 780 Third Avenue, 24th Floor, New York, New York 10017), counsel for the Counterclaimants.

We respectfully request that BRB direct Blakemore & Stern LLP to transfer the complete litigation file to Calderwood & Harkness without delay. The file transfer should include, without limitation, all pleadings, correspondence, discovery materials, work product, memoranda, notes, privileged communications, court filings, expert reports or analyses, and all other documents and materials in Blakemore & Stern's possession, custody, or control that relate to this matter. We will coordinate directly with Mr. Blakemore's office to facilitate an orderly and complete transfer.

BRB acknowledges and understands that Calderwood & Harkness has not reviewed, participated in, or supervised any aspect of the prior representation, including but not limited to the pre-litigation workout negotiations between BRB and Triton Harbor, the drafting or negotiation of the Forbearance and Modification Agreement dated October 6, 2023, the preparation or filing of the original Verified Complaint on August 12, 2024, or any other actions taken or advice rendered by Blakemore & Stern LLP. Accordingly, the Firm assumes no responsibility or liability for the work, advice, or strategic decisions of prior counsel, except to the extent that such work is expressly reviewed, adopted, and incorporated into the Firm's own work product going forward.

5. Engagement Team

The following attorneys have been assigned to the engagement team for this matter and will be responsible for providing legal services to BRB in connection with this litigation:

Linda Osei will have overall supervisory responsibility for the engagement and will serve as the primary point of contact for the Client on all substantive legal matters, strategic decisions, and key developments. Ms. Osei will also personally handle critical court appearances, depositions of key witnesses, and all significant motion practice.

Priya Anand will serve as the billing partner for this engagement and will oversee all fee arrangements, billing, and invoicing matters. Ms. Anand will also provide substantive litigation support and participate in the development of overall case strategy.

Carlos Espinoza will serve as the lead associate and will be responsible for the day-to-day management of this litigation, including coordination and management of fact and expert discovery, preparation of motion papers and memoranda of law, management of the document review process, and assistance with witness preparation and deposition practice.

Hannah Brinkley will assist the engagement team with legal research, document review, preparation of deposition outlines, drafting of correspondence and discovery-related filings, and other support tasks as assigned.

As the needs of this matter evolve, additional attorneys, paralegals, litigation support specialists, or other professional staff may be assigned to the engagement team. The Firm will provide advance notice to the Client of any such additions, along with the applicable billing rates for any new team members. Calderwood & Harkness may also recommend the retention of outside experts and consultants on behalf of BRB in connection with this matter, as discussed further in Section 8 below. Any such retention will be subject to BRB's prior written approval.

6. Fee Arrangements

6.1 Billing Rates

Legal services rendered by Calderwood & Harkness in connection with this engagement will be billed on an hourly basis at the standard rates set forth below, which are the applicable rates for calendar year 2024:

The foregoing rates are subject to annual review and adjustment, typically effective January 1 of each calendar year. In the event that the Firm adjusts billing rates for any timekeeper assigned to this matter, the Client will be notified in writing of any such changes at least thirty (30) days in advance of the effective date of the revised rates. The adjusted rates will apply to services rendered on or after the effective date of the rate change.

6.2 Billing Practices

Calderwood & Harkness will issue detailed monthly invoices to BRB for all professional services rendered and disbursements incurred during the preceding calendar month. Each invoice will include the following information for each time entry: (a) the date on which the service was performed; (b) the identity of the timekeeper who performed the service; (c) a narrative description of the work performed, in sufficient detail to permit the Client to evaluate the nature and necessity of the services; (d) the time expended, recorded in increments of one-tenth (0.1) of an hour; and (e) the applicable hourly rate for the timekeeper. Disbursements will be itemized separately on each invoice.

All invoices will be directed to the attention of Margaret Linden, SVP & General Counsel, at the address set forth above, unless BRB designates a different billing contact in writing. Invoices may be transmitted electronically via email in PDF format, unless BRB requests that hard copies be provided.

Payment of each invoice is due within thirty (30) days of the invoice date. If payment is not received within sixty (60) days of the invoice date, the Firm reserves the right, upon thirty (30) days' prior written notice to the Client, to suspend work on this matter or to seek to withdraw from the engagement. Any suspension of work or withdrawal by the Firm will be undertaken in compliance with all applicable court rules, orders, and professional responsibility obligations under the New York Rules of Professional Conduct.

6.3 Retainer. No advance retainer is required at this time, in recognition of the longstanding professional relationship between Calderwood & Harkness and Belmont Ridge Bank NA. The Firm, however, reserves the right to request an advance retainer from BRB at any future point during the engagement if the scope of the matter expands materially beyond the matters described in Section 3 above or if invoices are not paid within the terms specified in Section 6.2. Any retainer so requested will be held in the Firm's IOLA trust account in accordance with New York Rule of Professional Conduct 1.15 and will be applied against outstanding invoices as they become due.

7. Estimated Fees and Budget

At BRB's request, the Firm will prepare and provide a preliminary litigation budget within thirty (30) days of the date of this engagement letter. The budget will be organized by litigation phase, including but not limited to the following phases: (i) case assessment and file review; (ii) fact discovery; (iii) expert discovery; (iv) motion practice (including anticipated motions to dismiss and/or motions for summary judgment); (v) trial preparation; and (vi) trial.

BRB understands and acknowledges that any budget or fee estimate provided by Calderwood & Harkness is a good-faith projection based on the information available at the time the estimate is prepared. Such estimates are provided for planning purposes only and do not constitute a cap, guarantee, or fixed fee for legal services. Actual fees and costs may vary materially depending on numerous factors that are not entirely within the Firm's or the Client's control, including but not limited to: the volume and complexity of document discovery (we note that BRB's initial production universe consists of approximately 34,000 documents); the number, length, and location of depositions (five depositions are currently scheduled between February and March 2025); the extent and nature of motion practice by both sides; unanticipated developments in the litigation, including third-party discovery or intervention; the duration of any settlement negotiations; and the length of trial.

The Firm will promptly advise BRB if it becomes apparent that actual fees and costs are likely to materially exceed any previously provided budget estimate, and will consult with BRB regarding appropriate measures to manage costs, including adjustments to litigation strategy where feasible and consistent with BRB's objectives.

8. Costs and Disbursements

In addition to the professional fees described in Section 6 above, BRB will be responsible for the reimbursement of all reasonable out-of-pocket costs and disbursements incurred by Calderwood & Harkness in connection with this engagement. Such costs and disbursements include, but are not limited to, the following:

• Court filing fees and service of process costs;

• Deposition transcript fees, including the cost of expedited transcripts where reasonably necessary, and videography costs for videotaped depositions;

• Expert witness fees and expenses, including fees for consulting and testifying experts (subject to prior approval as set forth below; the Firm anticipates recommending the retention of Wentworth Risk Advisors LLC, and specifically Dr. Gerald Stokes, as a banking practices expert to opine on industry standards and customs in loan workouts and forbearance agreements);

• Electronic discovery costs, including the hosting, processing, review, and production of electronically stored information ("ESI") through the Firm's e-discovery platform or a third-party vendor;

• Travel expenses reasonably incurred in connection with depositions, court appearances, hearings, and client meetings, including airfare, ground transportation, lodging, and meals;

• Photocopying, printing, scanning, and binding costs;

• Messenger, courier, and overnight delivery charges;

• Online legal research charges attributable to this matter, including charges for Westmark Data Systems, Sundial Solutions, and other research databases; and

• Any other reasonable costs and disbursements necessarily incurred in the prosecution and defense of this litigation.

Third-party expert retention agreements, including the terms and fees of any expert retained on behalf of BRB, will require the prior written approval of BRB's General Counsel or her designee. Additionally, any single disbursement or cost item exceeding Ten Thousand Dollars ($10,000) will require prior written approval from BRB's General Counsel or her designee before such cost is incurred. For purposes of this section, BRB designates Margaret Linden as the authorized approver, with Thomas Hargreaves as the alternate.

9. Confidentiality and Privilege

All communications between Calderwood & Harkness and BRB, and all information shared between the Firm and the Client, in connection with this engagement are intended to be privileged and confidential, protected from disclosure by the attorney-client privilege, the work product doctrine, and all other applicable privileges and protections under federal and New York law.

BRB agrees to take reasonable steps to preserve the privileged and confidential nature of all communications with the Firm, including limiting the dissemination of privileged materials, memoranda, legal analyses, and strategic communications to those officers, directors, and employees of BRB who have a genuine need to know in connection with the management and oversight of this litigation. BRB should be mindful that unnecessary distribution of privileged materials within the organization, or disclosure to third parties outside the scope of any applicable privilege, may result in a waiver of the attorney-client privilege.

For its part, Calderwood & Harkness will maintain all confidential client information in strict accordance with the Firm's professional obligations under the New York Rules of Professional Conduct, including Rule 1.6 (Confidentiality of Information), and will not disclose any confidential information relating to the representation except as authorized by BRB or as required by law.

We also recommend that BRB advise any officers, employees, or other personnel who may be contacted by opposing counsel, counsel for third parties, or any other person regarding the subject matter of this litigation to refrain from discussing or disclosing any privileged communications, legal advice, or litigation strategy, and to direct all such inquiries to Calderwood & Harkness. This recommendation is particularly important given the nature of the counterclaims and the fact that certain BRB employees may be targets of inquiry by the Counterclaimants' counsel.

10. Conflict of Interest Disclosure

Calderwood & Harkness has conducted a thorough conflict-of-interest review in accordance with the New York Rules of Professional Conduct and the Firm's internal conflict-checking procedures. Based on this review, the Firm confirms the following:

(a) Calderwood & Harkness does not currently represent, and has not at any time previously represented, Triton Harbor Industries, LLC, Marcus J. Kappel, Elaine D. Kappel, or any entity affiliated with or controlled by any of the foregoing parties.

(b) Calderwood & Harkness does not currently represent, and has not at any time previously represented, Kestrel Voss & Huang LLP or any of its attorneys in any matter.

(d) Calderwood & Harkness has, in prior years, performed unrelated corporate advisory work for certain affiliates and subsidiaries within the broader Belmont Ridge Financial Holdings, Inc. corporate structure. This prior work was limited in scope, unrelated to the subject matter of the current engagement, and does not, in the Firm's assessment, create any actual or potential conflict of interest with respect to the representation of BRB in this litigation.

In the event that any actual or potential conflict of interest arises during the course of this engagement, the Firm will promptly notify BRB in writing and will take all appropriate measures as required by the New York Rules of Professional Conduct, including seeking informed written consent from affected parties where permissible, or, if necessary, withdrawing from the representation.

11. Document Preservation

BRB has been separately advised of its obligation under applicable law to preserve all documents, records, and electronically stored information ("ESI") that are potentially relevant to the claims and counterclaims in this litigation. This obligation extends to all forms of information, whether in paper or electronic form, including emails, text messages, instant messages, voicemails, memoranda, handwritten notes, spreadsheets, presentations, database records, and all other materials that may be relevant to the issues in dispute.

A formal Litigation Hold Memorandum will be transmitted to BRB under separate cover, with a targeted delivery date of November 6, 2024. That memorandum will provide detailed instructions regarding the categories of documents and ESI to be preserved, the identity of key custodians whose files must be preserved, and the procedures to be followed to ensure compliance with BRB's preservation obligations. BRB's full and timely compliance with the litigation hold is essential to the defense of this matter and to the avoidance of any adverse inferences or sanctions that could result from the spoliation of evidence.

At a minimum, the key custodians whose files and communications must be preserved include the following individuals:

• Derek Whitmore, Senior Vice President, Head of Special Assets Group

• Joanna Reeves, Vice President, Special Assets Group

• Philip Aaronson, Executive Vice President, Chief Credit Officer

• Margaret Linden, Senior Vice President & General Counsel

• Thomas Hargreaves, Vice President & Associate General Counsel

• All other BRB personnel who participated in or had material involvement with the Triton Harbor lending relationship, including the origination and underwriting of the credit facilities, the credit downgrade on or about March 8, 2023, the workout negotiations leading to the Forbearance and Modification Agreement, the execution of the Forbearance and Modification Agreement and related guaranty documents on October 6, 2023, the monitoring of compliance with the forbearance terms, and the decision to accelerate the loan obligations on April 15, 2024

We will work with BRB's information technology and records management personnel to ensure that the litigation hold is properly implemented and that relevant custodial files and data sources are identified and preserved.

12. Communication and Reporting

Linda Osei will serve as the primary point of contact between Calderwood & Harkness and BRB for all substantive legal matters, strategic decisions, and significant developments in this litigation. BRB should direct all substantive communications and inquiries regarding this matter to Ms. Osei in the first instance.

The Firm will provide regular status updates to BRB, including written status reports at least monthly, which will summarize material developments in the litigation, upcoming deadlines and court dates, key strategic recommendations, and any areas requiring the Client's attention or decision-making. In addition to the monthly written reports, Ms. Osei or another member of the engagement team will be available for telephone or in-person conferences with BRB's legal team as needed to discuss case strategy, significant filings, discovery issues, and settlement considerations.

All formal correspondence with opposing counsel, Kestrel Voss & Huang LLP, and all filings with the Court will be copied to Margaret Linden and Thomas Hargreaves at Belmont Ridge Bank NA, unless BRB directs otherwise in writing.

BRB designates Margaret Linden as the authorized representative of the Client for purposes of providing instructions, directions, and approvals in connection with this engagement, including approvals required under Sections 6 and 8 of this letter. Thomas Hargreaves is designated as the alternate contact and is authorized to act on BRB's behalf in the event that Ms. Linden is unavailable.

13. Termination

Either party may terminate this engagement at any time upon written notice to the other party, subject to the following conditions:

(a) Termination by the Client. If BRB elects to terminate this engagement, BRB will remain responsible for the payment of all fees for professional services rendered and all costs and disbursements incurred through the effective date of termination. Upon termination, the Firm will take all reasonable steps to cooperate in the orderly transition of the matter to BRB's successor counsel, including the prompt transfer of all files and work product.

(b) Withdrawal by the Firm. If Calderwood & Harkness seeks to withdraw from the representation, the Firm will provide BRB with reasonable advance written notice of its intention to withdraw and will cooperate fully in the orderly transition of the matter to successor counsel. Any withdrawal by the Firm will be subject to compliance with all applicable court rules, any orders of the Court, and the Firm's professional responsibility obligations under the New York Rules of Professional Conduct. The Firm will seek the approval of the Court for its withdrawal, as required.

(c) Surviving Obligations. The Firm's obligations to preserve the confidentiality of client information, to maintain client files in accordance with applicable retention requirements, and to cooperate in the transition of the matter to successor counsel will survive the termination of this engagement, regardless of the reason for termination.

14. Limitation of Engagement

This engagement is strictly limited to the matters described in Section 3 of this letter. Calderwood & Harkness does not undertake to advise BRB on any other legal matters, regulatory compliance issues, business decisions, or strategic considerations except as they relate directly to the litigation described herein, unless a separate engagement is agreed upon in writing by the Firm and the Client.

Without limiting the foregoing, the Firm's representation in this engagement does not extend to any appeal from the trial-level proceedings in Index No. 654871/2024. In the event that an appeal becomes necessary or desirable following the conclusion of the trial-level proceedings, the parties will discuss and, if mutually agreeable, enter into a separate engagement letter addressing the terms and scope of any appellate representation.

15. Governing Law and Dispute Resolution

This engagement letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict-of-laws principles. The rights and obligations of the parties hereunder shall be subject to and interpreted in accordance with the New York Rules of Professional Conduct, to the extent applicable.

In the event of any dispute arising out of or relating to this engagement, including any dispute regarding fees, billing, or the scope of the Firm's representation, the parties agree to resolve such dispute through binding arbitration. The arbitration shall be conducted before a single arbitrator mutually agreed upon by the parties, sitting in New York County, New York. If the parties are unable to agree on an arbitrator within thirty (30) days of a written demand for arbitration, either party may request the appointment of an arbitrator by the American Arbitration Association in accordance with its then-prevailing Commercial Arbitration Rules. The decision of the arbitrator shall be final and binding and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees in connection with any such arbitration, unless the arbitrator determines otherwise.

16. Acknowledgment and Acceptance

We are grateful for BRB's confidence in Calderwood & Harkness and look forward to working with you and your team on this important matter. We believe the Firm is well positioned to provide vigorous and effective representation in both the defense of the counterclaims and the prosecution of BRB's original claims.

Please confirm your acceptance of the terms set forth in this engagement letter by signing and dating the enclosed duplicate copy in the space provided below and returning it to my attention. Your signature will indicate that Belmont Ridge Bank NA agrees to be bound by all of the terms and conditions set forth herein.

If you have any questions regarding any provision of this letter, please do not hesitate to contact me directly at (212) 554-7100 or losei@calderwoodharkness.com. We are happy to discuss any aspect of this engagement at your convenience.

We look forward to commencing our work on this matter promptly.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Linda Osei Partner

Date: November 4, 2024

ACKNOWLEDGED AND AGREED:

By signing below, the undersigned, on behalf of Belmont Ridge Bank NA, acknowledges receipt of this engagement letter, confirms that the undersigned is authorized to execute this letter on behalf of Belmont Ridge Bank NA, and agrees to the terms and conditions set forth herein.

BELMONT RIDGE BANK NA

By: ________

Margaret Linden Senior Vice President & General Counsel

Date: ________

Enclosures:

1. Duplicate copy of this engagement letter for countersignature

2. IRS Form W-9 (Calderwood & Harkness LLP)

3. Calderwood & Harkness LLP Standard Outside Counsel Billing Guidelines Supplement

cc: Thomas Hargreaves, Vice President & Associate General Counsel, Belmont Ridge Bank NA cc: Priya Anand, Partner, Calderwood & Harkness LLP cc: Carlos Espinoza, Senior Associate, Calderwood & Harkness LLP

Component	Amount
Term Loan A — Outstanding Principal Balance	$10,625,000
Revolving Credit Facility — Outstanding Principal Balance	$6,200,000
Accrued and Unpaid Interest (through April 15, 2024)	$487,322
Late Fees and Default Interest	$143,890
Total Accelerated Amount	$17,456,212
Attorney	Role	Status
Linda Osei	Responsible Partner, Litigation	Partner
Priya Anand	Billing Partner, Litigation	Partner
Carlos Espinoza	Lead Associate	Senior Associate
Hannah Brinkley	Working Associate	Junior Associate
Timekeeper	Position	Hourly Rate
Linda Osei	Partner	$1,150
Priya Anand	Partner	$1,075
Carlos Espinoza	Senior Associate	$775
Hannah Brinkley	Junior Associate	$595
Paralegals / Litigation Support Staff	—	$295 – $375

CALDERWOOD & HARKNESS LLP Attorneys at Law 600 Lexington Avenue, 30th Floor New York, New York 10022 Telephone: (212) 554-7000 | Facsimile: (212) 554-7001 www.calderwoodharkness.com
November 4, 2024
Via Email and U.S. Mail
Margaret Linden, Esq. Senior Vice President & General Counsel Belmont Ridge Bank NA 1200 Avenue of the Americas, 38th Floor New York, New York 10036
Re: Engagement of Calderwood & Harkness LLP — Defense of Counterclaims in Belmont Ridge Bank NA v. Triton Harbor Industries, LLC, Marcus J. Kappel, and Elaine D. Kappel, Index No. 654871/2024, New York Supreme Court, New York County, Commercial Division
Calderwood & Harkness Matter No. 1022-00005
Dear Ms. Linden:
1. Introduction and Purpose
Thank you for selecting Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm") to represent Belmont Ridge Bank NA ("BRB" or the "Client") in connection with the above-referenced matter. We are pleased to have the opportunity to serve as counsel to BRB and are committed to providing the highest quality legal representation in the defense of the counterclaims asserted against BRB, as well as in the continued prosecution of BRB's original claims in this action.
The purpose of this letter is to set forth the terms and conditions under which Calderwood & Harkness will provide legal services to BRB in this engagement. This engagement letter, upon your countersignature, constitutes the binding agreement between the Firm and the Client with respect to the matters described herein and supersedes any prior oral or written discussions, understandings, or agreements regarding the scope, terms, or conditions of the Firm's representation of BRB in this matter.
We ask that you please review this letter carefully, countersign the enclosed duplicate copy, and return it to my attention at the address set forth above (or via email to losei@calderwoodharkness.com) to confirm your acceptance of these terms. We are, of course, available to discuss any questions or concerns you may have regarding the terms set forth herein before you execute this agreement.
2. Identification of the Client
The client in this engagement is Belmont Ridge Bank NA, a national banking association chartered under the authority of the Office of the Comptroller of the Currency, OCC Charter No. 14-00927, with its principal executive offices located at 1200 Avenue of the Americas, 38th Floor, New York, New York 10036. All references in this letter to "BRB," the "Client," or the "Bank" shall refer exclusively to the corporate entity Belmont Ridge Bank NA.
It is important to clarify that Calderwood & Harkness's representation in this engagement is limited to the corporate entity Belmont Ridge Bank NA. By virtue of this engagement, the Firm does not represent, and shall not be deemed to represent, any individual officers, directors, employees, agents, or other personnel of BRB in their personal or individual capacities. Without limiting the generality of the foregoing, this engagement does not establish an attorney-client relationship between Calderwood & Harkness and any of the following individuals: Derek Whitmore, Senior Vice President, Head of Special Assets Group; Joanna Reeves, Vice President, Special Assets Group; Philip Aaronson, Executive Vice President, Chief Credit Officer; or any other BRB personnel who may have had involvement in the transactions, negotiations, or decisions at issue in this litigation.
We note that certain individual officers and employees of BRB may be fact witnesses in this litigation and may also have potential personal exposure arising from the allegations in the counterclaims, particularly with respect to the claims of fraudulent inducement and negligent misrepresentation. We strongly recommend that BRB advise any such individuals of their right to seek independent legal counsel at their own expense, or at the expense of BRB to the extent permitted by applicable law, regulation, and BRB's organizational documents. If you would like to discuss this recommendation in further detail, or if BRB wishes to engage Calderwood & Harkness to represent any individual employee in connection with this matter, a separate written engagement letter would need to be entered into for each such individual, subject to any applicable conflict-of-interest considerations.
3. Scope of Engagement
3.1 Defense of Counterclaims
Calderwood & Harkness is retained to defend BRB against the counterclaims filed on October 18, 2024, by Triton Harbor Industries, LLC, a Delaware limited liability company ("Triton Harbor"), Marcus J. Kappel, and Elaine D. Kappel (collectively, the "Counterclaimants"), in the action styled Belmont Ridge Bank NA v. Triton Harbor Industries, LLC, Marcus J. Kappel, and Elaine D. Kappel, Index No. 654871/2024, currently pending in the Commercial Division of the New York Supreme Court, New York County, before the Honorable Althea Marchetti, J.S.C.
As set forth in the Counterclaimants' Answer and Counterclaims, the counterclaims assert the following causes of action against BRB:
(1) Fraudulent Inducement — alleging that BRB, through its officers and agents, made material misrepresentations and omissions to Triton Harbor and the individual Kappels in connection with the negotiation and execution of the Forbearance and Modification Agreement dated October 6, 2023, and the amended and new personal guaranties;
(2) Negligent Misrepresentation — alleging that BRB owed a duty of care to the Counterclaimants and breached that duty by providing false or misleading information regarding the terms, conditions, and consequences of the forbearance arrangement;
(3) Breach of the Implied Covenant of Good Faith and Fair Dealing — alleging that BRB acted in bad faith in the administration of the Forbearance and Modification Agreement by, among other things, accelerating the loan obligations without providing a meaningful opportunity to cure; and
(4) Rescission — seeking rescission of the Forbearance and Modification Agreement dated October 6, 2023, and the amended personal guaranty executed by Marcus J. Kappel and the new personal guaranty executed by Elaine D. Kappel, both dated October 6, 2023, on the grounds that the Counterclaimants' consent was procured by fraud and duress.
The Counterclaimants seek compensatory damages in an amount not less than Twelve Million Five Hundred Thousand Dollars ($12,500,000), together with unspecified punitive damages, attorneys' fees, costs, and such other and further relief as the Court may deem just and proper.
The scope of Calderwood & Harkness's defense engagement encompasses all phases of this litigation with respect to the counterclaims, including but not limited to: (a) pre-trial proceedings and conferences; (b) fact and expert discovery, including document production, interrogatories, depositions, and requests for admission; (c) motion practice, including motions to dismiss, motions for summary judgment, and all other pre-trial and in limine motions; (d) trial preparation, including witness preparation and the development of trial strategy; and (e) trial. The scope of this engagement may be modified by mutual written agreement of the Firm and the Client at any time.
3.2 Prosecution of Original Action
In addition to the defense of the counterclaims, Calderwood & Harkness is retained to continue the prosecution of BRB's original claims in the same action, Index No. 654871/2024, as initially filed on August 12, 2024, by BRB's prior counsel of record, Blakemore & Stern LLP. The Firm will assume responsibility for the continued prosecution of BRB's affirmative claims from the point at which the substitution of counsel becomes effective.
BRB's original claims, as set forth in the Verified Complaint filed on August 12, 2024, seek the following relief:
(a) enforcement of the Forbearance and Modification Agreement dated October 6, 2023, between BRB and Triton Harbor Industries, LLC;
(b) judgment on the amended personal guaranty of Marcus J. Kappel, unlimited in amount, as amended and restated on October 6, 2023;
(c) judgment on the personal guaranty of Elaine D. Kappel, unlimited in amount, executed on October 6, 2023;
(d) recovery of the full deficiency balance owed to BRB following the acceleration of the credit facilities; and
(e) attorneys' fees, costs, and such other relief as may be appropriate.
As of April 15, 2024, the date of acceleration, the total accelerated amount owed by Triton Harbor and the guarantors was Seventeen Million Four Hundred Fifty-Six Thousand Two Hundred Twelve Dollars ($17,456,212), consisting of the following components:
Additional interest, default interest, and fees continue to accrue in accordance with the terms of the underlying credit agreements and the Forbearance and Modification Agreement.
3.3 Related Matters Excluded from Scope
Notwithstanding the foregoing, this engagement does not include, and Calderwood & Harkness is not being retained to provide, legal services in connection with the following matters, each of which is expressly excluded from the scope of this engagement:
(a) Regulatory Proceedings. Any proceedings, examinations, investigations, or inquiries initiated by or before the Office of the Comptroller of the Currency ("OCC"), the Federal Deposit Insurance Corporation ("FDIC"), or any other federal or state banking regulatory authority in connection with BRB's lending practices, loan administration, or any related matters;
(b) D&O Insurance Coverage. Any disputes regarding directors' and officers' liability insurance coverage, indemnification, or reimbursement arising from the counterclaims or any related proceedings, which we understand are currently being handled by Crane, Alcott & Shire LLP, under the supervision of Robert Alcott, Esq.;
(c) Foreclosure Proceedings. The foreclosure proceedings on the Long Island City terminal facility (the "Collateral"), which were commenced on or about May 20, 2024, in the Supreme Court, Queens County, unless Calderwood & Harkness and BRB separately agree in writing to expand the scope of this engagement to include those proceedings;
(d) Tax and Accounting Matters. Any tax advice, tax planning, or accounting matters, including but not limited to the classification of the Triton Harbor loan for loan-loss reserve purposes, which we understand may involve BRB's external auditors, Tavrenis & Hatch CPAs LLP; and
(e) Title Insurance Claims. Any claims or proceedings under or related to the title insurance policy issued by Harborview Title & Escrow Co., Policy No. HT-NYC-2021-04553, pertaining to the Long Island City terminal facility.
If, during the course of this engagement, circumstances arise that require the scope of the Firm's representation to be expanded to encompass any of the foregoing matters or any other matter not described in Sections 3.1 and 3.2 above, the parties will execute a supplemental engagement letter setting forth the terms and conditions applicable to such expanded representation.
4. Substitution of Counsel
Calderwood & Harkness is replacing Blakemore & Stern LLP (David Blakemore, Esq., 120 Broadway, Suite 3500, New York, New York 10271) as counsel of record for BRB in the above-referenced action, Index No. 654871/2024.
Promptly upon the execution of this engagement letter, Calderwood & Harkness will prepare and file a Notice of Substitution of Counsel with the Clerk of the New York Supreme Court, New York County, in accordance with applicable rules and procedures, and will serve a copy of such notice on all parties, including opposing counsel, Kestrel Voss & Huang LLP (Theodore "Ted" Huang, Esq., and Natasha Orlov, Esq., 780 Third Avenue, 24th Floor, New York, New York 10017), counsel for the Counterclaimants.
We respectfully request that BRB direct Blakemore & Stern LLP to transfer the complete litigation file to Calderwood & Harkness without delay. The file transfer should include, without limitation, all pleadings, correspondence, discovery materials, work product, memoranda, notes, privileged communications, court filings, expert reports or analyses, and all other documents and materials in Blakemore & Stern's possession, custody, or control that relate to this matter. We will coordinate directly with Mr. Blakemore's office to facilitate an orderly and complete transfer.
BRB acknowledges and understands that Calderwood & Harkness has not reviewed, participated in, or supervised any aspect of the prior representation, including but not limited to the pre-litigation workout negotiations between BRB and Triton Harbor, the drafting or negotiation of the Forbearance and Modification Agreement dated October 6, 2023, the preparation or filing of the original Verified Complaint on August 12, 2024, or any other actions taken or advice rendered by Blakemore & Stern LLP. Accordingly, the Firm assumes no responsibility or liability for the work, advice, or strategic decisions of prior counsel, except to the extent that such work is expressly reviewed, adopted, and incorporated into the Firm's own work product going forward.
5. Engagement Team
The following attorneys have been assigned to the engagement team for this matter and will be responsible for providing legal services to BRB in connection with this litigation:
Linda Osei will have overall supervisory responsibility for the engagement and will serve as the primary point of contact for the Client on all substantive legal matters, strategic decisions, and key developments. Ms. Osei will also personally handle critical court appearances, depositions of key witnesses, and all significant motion practice.
Priya Anand will serve as the billing partner for this engagement and will oversee all fee arrangements, billing, and invoicing matters. Ms. Anand will also provide substantive litigation support and participate in the development of overall case strategy.
Carlos Espinoza will serve as the lead associate and will be responsible for the day-to-day management of this litigation, including coordination and management of fact and expert discovery, preparation of motion papers and memoranda of law, management of the document review process, and assistance with witness preparation and deposition practice.
Hannah Brinkley will assist the engagement team with legal research, document review, preparation of deposition outlines, drafting of correspondence and discovery-related filings, and other support tasks as assigned.
As the needs of this matter evolve, additional attorneys, paralegals, litigation support specialists, or other professional staff may be assigned to the engagement team. The Firm will provide advance notice to the Client of any such additions, along with the applicable billing rates for any new team members. Calderwood & Harkness may also recommend the retention of outside experts and consultants on behalf of BRB in connection with this matter, as discussed further in Section 8 below. Any such retention will be subject to BRB's prior written approval.
6. Fee Arrangements
6.1 Billing Rates
Legal services rendered by Calderwood & Harkness in connection with this engagement will be billed on an hourly basis at the standard rates set forth below, which are the applicable rates for calendar year 2024:
The foregoing rates are subject to annual review and adjustment, typically effective January 1 of each calendar year. In the event that the Firm adjusts billing rates for any timekeeper assigned to this matter, the Client will be notified in writing of any such changes at least thirty (30) days in advance of the effective date of the revised rates. The adjusted rates will apply to services rendered on or after the effective date of the rate change.
6.2 Billing Practices
Calderwood & Harkness will issue detailed monthly invoices to BRB for all professional services rendered and disbursements incurred during the preceding calendar month. Each invoice will include the following information for each time entry: (a) the date on which the service was performed; (b) the identity of the timekeeper who performed the service; (c) a narrative description of the work performed, in sufficient detail to permit the Client to evaluate the nature and necessity of the services; (d) the time expended, recorded in increments of one-tenth (0.1) of an hour; and (e) the applicable hourly rate for the timekeeper. Disbursements will be itemized separately on each invoice.
All invoices will be directed to the attention of Margaret Linden, SVP & General Counsel, at the address set forth above, unless BRB designates a different billing contact in writing. Invoices may be transmitted electronically via email in PDF format, unless BRB requests that hard copies be provided.
Payment of each invoice is due within thirty (30) days of the invoice date. If payment is not received within sixty (60) days of the invoice date, the Firm reserves the right, upon thirty (30) days' prior written notice to the Client, to suspend work on this matter or to seek to withdraw from the engagement. Any suspension of work or withdrawal by the Firm will be undertaken in compliance with all applicable court rules, orders, and professional responsibility obligations under the New York Rules of Professional Conduct.
6.3 Retainer.  No advance retainer is required at this time, in recognition of the longstanding professional relationship between Calderwood & Harkness and Belmont Ridge Bank NA. The Firm, however, reserves the right to request an advance retainer from BRB at any future point during the engagement if the scope of the matter expands materially beyond the matters described in Section 3 above or if invoices are not paid within the terms specified in Section 6.2. Any retainer so requested will be held in the Firm's IOLA trust account in accordance with New York Rule of Professional Conduct 1.15 and will be applied against outstanding invoices as they become due.
7. Estimated Fees and Budget
At BRB's request, the Firm will prepare and provide a preliminary litigation budget within thirty (30) days of the date of this engagement letter. The budget will be organized by litigation phase, including but not limited to the following phases: (i) case assessment and file review; (ii) fact discovery; (iii) expert discovery; (iv) motion practice (including anticipated motions to dismiss and/or motions for summary judgment); (v) trial preparation; and (vi) trial.
BRB understands and acknowledges that any budget or fee estimate provided by Calderwood & Harkness is a good-faith projection based on the information available at the time the estimate is prepared. Such estimates are provided for planning purposes only and do not constitute a cap, guarantee, or fixed fee for legal services. Actual fees and costs may vary materially depending on numerous factors that are not entirely within the Firm's or the Client's control, including but not limited to: the volume and complexity of document discovery (we note that BRB's initial production universe consists of approximately 34,000 documents); the number, length, and location of depositions (five depositions are currently scheduled between February and March 2025); the extent and nature of motion practice by both sides; unanticipated developments in the litigation, including third-party discovery or intervention; the duration of any settlement negotiations; and the length of trial.
The Firm will promptly advise BRB if it becomes apparent that actual fees and costs are likely to materially exceed any previously provided budget estimate, and will consult with BRB regarding appropriate measures to manage costs, including adjustments to litigation strategy where feasible and consistent with BRB's objectives.
8. Costs and Disbursements
In addition to the professional fees described in Section 6 above, BRB will be responsible for the reimbursement of all reasonable out-of-pocket costs and disbursements incurred by Calderwood & Harkness in connection with this engagement. Such costs and disbursements include, but are not limited to, the following:
•  Court filing fees and service of process costs;
•  Deposition transcript fees, including the cost of expedited transcripts where reasonably necessary, and videography costs for videotaped depositions;
•  Expert witness fees and expenses, including fees for consulting and testifying experts (subject to prior approval as set forth below; the Firm anticipates recommending the retention of Wentworth Risk Advisors LLC, and specifically Dr. Gerald Stokes, as a banking practices expert to opine on industry standards and customs in loan workouts and forbearance agreements);
•  Electronic discovery costs, including the hosting, processing, review, and production of electronically stored information ("ESI") through the Firm's e-discovery platform or a third-party vendor;
•  Travel expenses reasonably incurred in connection with depositions, court appearances, hearings, and client meetings, including airfare, ground transportation, lodging, and meals;
•  Photocopying, printing, scanning, and binding costs;
•  Messenger, courier, and overnight delivery charges;
•  Online legal research charges attributable to this matter, including charges for Westmark Data Systems, Sundial Solutions, and other research databases; and
•  Any other reasonable costs and disbursements necessarily incurred in the prosecution and defense of this litigation.
Third-party expert retention agreements, including the terms and fees of any expert retained on behalf of BRB, will require the prior written approval of BRB's General Counsel or her designee. Additionally, any single disbursement or cost item exceeding Ten Thousand Dollars ($10,000) will require prior written approval from BRB's General Counsel or her designee before such cost is incurred. For purposes of this section, BRB designates Margaret Linden as the authorized approver, with Thomas Hargreaves as the alternate.
9. Confidentiality and Privilege
All communications between Calderwood & Harkness and BRB, and all information shared between the Firm and the Client, in connection with this engagement are intended to be privileged and confidential, protected from disclosure by the attorney-client privilege, the work product doctrine, and all other applicable privileges and protections under federal and New York law.
BRB agrees to take reasonable steps to preserve the privileged and confidential nature of all communications with the Firm, including limiting the dissemination of privileged materials, memoranda, legal analyses, and strategic communications to those officers, directors, and employees of BRB who have a genuine need to know in connection with the management and oversight of this litigation. BRB should be mindful that unnecessary distribution of privileged materials within the organization, or disclosure to third parties outside the scope of any applicable privilege, may result in a waiver of the attorney-client privilege.
For its part, Calderwood & Harkness will maintain all confidential client information in strict accordance with the Firm's professional obligations under the New York Rules of Professional Conduct, including Rule 1.6 (Confidentiality of Information), and will not disclose any confidential information relating to the representation except as authorized by BRB or as required by law.
We also recommend that BRB advise any officers, employees, or other personnel who may be contacted by opposing counsel, counsel for third parties, or any other person regarding the subject matter of this litigation to refrain from discussing or disclosing any privileged communications, legal advice, or litigation strategy, and to direct all such inquiries to Calderwood & Harkness. This recommendation is particularly important given the nature of the counterclaims and the fact that certain BRB employees may be targets of inquiry by the Counterclaimants' counsel.
10. Conflict of Interest Disclosure
Calderwood & Harkness has conducted a thorough conflict-of-interest review in accordance with the New York Rules of Professional Conduct and the Firm's internal conflict-checking procedures. Based on this review, the Firm confirms the following:
(a) Calderwood & Harkness does not currently represent, and has not at any time previously represented, Triton Harbor Industries, LLC, Marcus J. Kappel, Elaine D. Kappel, or any entity affiliated with or controlled by any of the foregoing parties.
(b) Calderwood & Harkness does not currently represent, and has not at any time previously represented, Kestrel Voss & Huang LLP or any of its attorneys in any matter.
(c) Calderwood & Harkness does not currently represent any party adverse to Belmont Ridge Bank NA in any pending matter.
(d) Calderwood & Harkness has, in prior years, performed unrelated corporate advisory work for certain affiliates and subsidiaries within the broader Belmont Ridge Financial Holdings, Inc. corporate structure. This prior work was limited in scope, unrelated to the subject matter of the current engagement, and does not, in the Firm's assessment, create any actual or potential conflict of interest with respect to the representation of BRB in this litigation.
In the event that any actual or potential conflict of interest arises during the course of this engagement, the Firm will promptly notify BRB in writing and will take all appropriate measures as required by the New York Rules of Professional Conduct, including seeking informed written consent from affected parties where permissible, or, if necessary, withdrawing from the representation.
11. Document Preservation
BRB has been separately advised of its obligation under applicable law to preserve all documents, records, and electronically stored information ("ESI") that are potentially relevant to the claims and counterclaims in this litigation. This obligation extends to all forms of information, whether in paper or electronic form, including emails, text messages, instant messages, voicemails, memoranda, handwritten notes, spreadsheets, presentations, database records, and all other materials that may be relevant to the issues in dispute.
A formal Litigation Hold Memorandum will be transmitted to BRB under separate cover, with a targeted delivery date of November 6, 2024. That memorandum will provide detailed instructions regarding the categories of documents and ESI to be preserved, the identity of key custodians whose files must be preserved, and the procedures to be followed to ensure compliance with BRB's preservation obligations. BRB's full and timely compliance with the litigation hold is essential to the defense of this matter and to the avoidance of any adverse inferences or sanctions that could result from the spoliation of evidence.
At a minimum, the key custodians whose files and communications must be preserved include the following individuals:
•  Derek Whitmore, Senior Vice President, Head of Special Assets Group
•  Joanna Reeves, Vice President, Special Assets Group
•  Philip Aaronson, Executive Vice President, Chief Credit Officer
•  Margaret Linden, Senior Vice President & General Counsel
•  Thomas Hargreaves, Vice President & Associate General Counsel
•  All other BRB personnel who participated in or had material involvement with the Triton Harbor lending relationship, including the origination and underwriting of the credit facilities, the credit downgrade on or about March 8, 2023, the workout negotiations leading to the Forbearance and Modification Agreement, the execution of the Forbearance and Modification Agreement and related guaranty documents on October 6, 2023, the monitoring of compliance with the forbearance terms, and the decision to accelerate the loan obligations on April 15, 2024
We will work with BRB's information technology and records management personnel to ensure that the litigation hold is properly implemented and that relevant custodial files and data sources are identified and preserved.
12. Communication and Reporting
Linda Osei will serve as the primary point of contact between Calderwood & Harkness and BRB for all substantive legal matters, strategic decisions, and significant developments in this litigation. BRB should direct all substantive communications and inquiries regarding this matter to Ms. Osei in the first instance.
The Firm will provide regular status updates to BRB, including written status reports at least monthly, which will summarize material developments in the litigation, upcoming deadlines and court dates, key strategic recommendations, and any areas requiring the Client's attention or decision-making. In addition to the monthly written reports, Ms. Osei or another member of the engagement team will be available for telephone or in-person conferences with BRB's legal team as needed to discuss case strategy, significant filings, discovery issues, and settlement considerations.
All formal correspondence with opposing counsel, Kestrel Voss & Huang LLP, and all filings with the Court will be copied to Margaret Linden and Thomas Hargreaves at Belmont Ridge Bank NA, unless BRB directs otherwise in writing.
BRB designates Margaret Linden as the authorized representative of the Client for purposes of providing instructions, directions, and approvals in connection with this engagement, including approvals required under Sections 6 and 8 of this letter. Thomas Hargreaves is designated as the alternate contact and is authorized to act on BRB's behalf in the event that Ms. Linden is unavailable.
13. Termination
Either party may terminate this engagement at any time upon written notice to the other party, subject to the following conditions:
(a) Termination by the Client. If BRB elects to terminate this engagement, BRB will remain responsible for the payment of all fees for professional services rendered and all costs and disbursements incurred through the effective date of termination. Upon termination, the Firm will take all reasonable steps to cooperate in the orderly transition of the matter to BRB's successor counsel, including the prompt transfer of all files and work product.
(b) Withdrawal by the Firm. If Calderwood & Harkness seeks to withdraw from the representation, the Firm will provide BRB with reasonable advance written notice of its intention to withdraw and will cooperate fully in the orderly transition of the matter to successor counsel. Any withdrawal by the Firm will be subject to compliance with all applicable court rules, any orders of the Court, and the Firm's professional responsibility obligations under the New York Rules of Professional Conduct. The Firm will seek the approval of the Court for its withdrawal, as required.
(c) Surviving Obligations. The Firm's obligations to preserve the confidentiality of client information, to maintain client files in accordance with applicable retention requirements, and to cooperate in the transition of the matter to successor counsel will survive the termination of this engagement, regardless of the reason for termination.
14. Limitation of Engagement
This engagement is strictly limited to the matters described in Section 3 of this letter. Calderwood & Harkness does not undertake to advise BRB on any other legal matters, regulatory compliance issues, business decisions, or strategic considerations except as they relate directly to the litigation described herein, unless a separate engagement is agreed upon in writing by the Firm and the Client.
Without limiting the foregoing, the Firm's representation in this engagement does not extend to any appeal from the trial-level proceedings in Index No. 654871/2024. In the event that an appeal becomes necessary or desirable following the conclusion of the trial-level proceedings, the parties will discuss and, if mutually agreeable, enter into a separate engagement letter addressing the terms and scope of any appellate representation.
15. Governing Law and Dispute Resolution
This engagement letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict-of-laws principles. The rights and obligations of the parties hereunder shall be subject to and interpreted in accordance with the New York Rules of Professional Conduct, to the extent applicable.
In the event of any dispute arising out of or relating to this engagement, including any dispute regarding fees, billing, or the scope of the Firm's representation, the parties agree to resolve such dispute through binding arbitration. The arbitration shall be conducted before a single arbitrator mutually agreed upon by the parties, sitting in New York County, New York. If the parties are unable to agree on an arbitrator within thirty (30) days of a written demand for arbitration, either party may request the appointment of an arbitrator by the American Arbitration Association in accordance with its then-prevailing Commercial Arbitration Rules. The decision of the arbitrator shall be final and binding and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees in connection with any such arbitration, unless the arbitrator determines otherwise.
16. Acknowledgment and Acceptance
We are grateful for BRB's confidence in Calderwood & Harkness and look forward to working with you and your team on this important matter. We believe the Firm is well positioned to provide vigorous and effective representation in both the defense of the counterclaims and the prosecution of BRB's original claims.
Please confirm your acceptance of the terms set forth in this engagement letter by signing and dating the enclosed duplicate copy in the space provided below and returning it to my attention. Your signature will indicate that Belmont Ridge Bank NA agrees to be bound by all of the terms and conditions set forth herein.
If you have any questions regarding any provision of this letter, please do not hesitate to contact me directly at (212) 554-7100 or losei@calderwoodharkness.com. We are happy to discuss any aspect of this engagement at your convenience.
We look forward to commencing our work on this matter promptly.
Very truly yours,
CALDERWOOD & HARKNESS LLP
CALDERWOOD & HARKNESS LLP
By: ________
Linda Osei Partner
Date: November 4, 2024
ACKNOWLEDGED AND AGREED:
By signing below, the undersigned, on behalf of Belmont Ridge Bank NA, acknowledges receipt of this engagement letter, confirms that the undersigned is authorized to execute this letter on behalf of Belmont Ridge Bank NA, and agrees to the terms and conditions set forth herein.
BELMONT RIDGE BANK NA
By: ________
Margaret Linden Senior Vice President & General Counsel
Date: ________
Enclosures:
1.  Duplicate copy of this engagement letter for countersignature
2.  IRS Form W-9 (Calderwood & Harkness LLP)
3.  Calderwood & Harkness LLP Standard Outside Counsel Billing Guidelines Supplement
cc: Thomas Hargreaves, Vice President & Associate General Counsel, Belmont Ridge Bank NA cc: Priya Anand, Partner, Calderwood & Harkness LLP cc: Carlos Espinoza, Senior Associate, Calderwood & Harkness LLP
Component | Amount
Term Loan A — Outstanding Principal Balance | $10,625,000
Revolving Credit Facility — Outstanding Principal Balance | $6,200,000
Accrued and Unpaid Interest (through April 15, 2024) | $487,322
Late Fees and Default Interest | $143,890
Total Accelerated Amount | $17,456,212
Attorney | Role | Status
Linda Osei | Responsible Partner, Litigation | Partner
Priya Anand | Billing Partner, Litigation | Partner
Carlos Espinoza | Lead Associate | Senior Associate
Hannah Brinkley | Working Associate | Junior Associate
Timekeeper | Position | Hourly Rate
Linda Osei | Partner | $1,150
Priya Anand | Partner | $1,075
Carlos Espinoza | Senior Associate | $775
Hannah Brinkley | Junior Associate | $595
Paralegals / Litigation Support Staff | — | $295 – $375

November 4, 2024

CALDERWOOD & HARKNESS LLP

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGED AND AGREED:

BELMONT RIDGE BANK NA

Record

Parties

Dates

Amounts